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PARLIAMENT OF THE REPUBLIC OF FIJI

STANDING COMMITTEE ON FOREIGN AFFAIRS AND DEFENCE

REPORT ON THE WORLD TRADE ORGANISATION WTO - TRADE FACILITATION AGREEMENT

Parliament of the Republic of Fiji Parliamentary Paper No. 05 of 2017

January 2017

Published and Printed by the Department of Legislature, Parliament House, SUVA

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TABLE OF CONTENTS CHAIRS’S FOREWORD…………………………………………………………… 1

LIST OF ACRONYMS……………………………………………………………... 2

RECOMMENDATION………………………………………………………………

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PART 1

1.0 INTRODUCTION……………………………………………………………..

1.1 The Standing Committee on Foreign Affairs and Defence

1.2 Committee Members

1.3 Procedure and Program…………………………………………………

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PART 2

2.0 WTO- TRADE FACILITATION AGREEMENT…………………………..

2.1 Background

2.2 What is TFA Global Reform?

2.3 What is Special & Different Treatment (S&DT) Provisions?..................

2.4 Category A

2.5 Category B

2.6 Category C

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PART 3

3.0 COMMITTEE’S OBSERVATION AND AREA OF CONCERN…………

3.1 Requirement for Implementation

3.2 Impact of Ratification

3.3 Benefits……………………………………………………………

3.4 Stakeholders Observations

3.5 Challenges…………………………………………………………

3.6 Gender Analysis

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PART 4

4.0 CONCLUSION…………………………………………………………………..

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REFERENCE…………………………………………………………………………… 12

APPENDICES______________________________________________________________

1. SUMMARY OF THE ARTICLE ON WTO-TRADE FACILITATION AGREEMENT 2. POWERPOINT PRESENTATION 3. WRITTEN SUBMISSION

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CHAIR’S FOREWORD

I am pleased to present this Report on the World Trade Organisation (WTO) Trade

Facilitation Agreement of the Fiji Parliament Standing Committee on Foreign Affairs

and Defence (SCFAD) which was assigned to review and examine the Agreement.

This report provides a summary and analysis of written and oral submissions received at the

Committee meetings commencing from 12th October 2016. The report is divided into four

parts:

Part 1: covers the role and responsibilities of the Standing Committee and the inquiry

process in undertaking the review of the WTO Trade Facilitation Agreement;

Part 2: provides a brief overview of the WTO Trade Facilitation Agreement;

Part 3: details the Standing Committee’s observations and areas of concern and;

Part 4: provides a summary of the WTO Trade Facilitation Agreement.

The full verbatim reports will be available on the Parliamentary website.

The Constitution of the Republic of Fiji (Section 70) requires Parliament to establish

committees to scrutinise Government administration, examine Bills and subordinate

legislation, and undertake other functions as required under the rules and orders of

Parliament. One of the functions of the Standing Committees as stipulated in Standing Orders

110(e) is to review international treaties and conventions ratified by the Government and

monitor their implementation.

On behalf of the Honourable Members of the SCFAD, I would like to express my sincere

appreciation to all the Government Ministries, Organisations and individuals who made a

submission and/or attended public hearings. The outcome of the wide consultations

undertaken and submissions received from key stakeholders provided the Standing

Committee with an in-depth report of the WTO-TFA.

I also wish to extend my appreciation to the Honourable Members of the SCFAD and the

Secretariat Staff for their commitment and worthy contributions towards the completion of

this bi-partisan report. The Members of the Committee include the following: Hon. Mataiasi

Niumataiwalu, Hon. Mosese Bulitavu, Hon. Ratu Suliano Matanitobua and the Alternate

Members are: Hon. Jilila Kumar, Hon. Jiosefa Dulakiverata, Hon. Viliame Gavoka, Hon.

Salote Radrodro, Hon. Ro Kiniviliame Kiliraki and Hon. Howard R. Politini.

I commend this committee’s report to the Parliament for its consideration.

Hon. Netani B. Rika

Chairman

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LIST OF ACRONYMS

AFL Air Fiji Limited

ATS Air Terminal Service

BAF Biosecurity Authority Fiji

FRCA Fiji Revenue & Customs Authority

FTDC Focused Trade Development Committee

FTPF Fijian Trade Policy Framework

LDCs Least Developed Countries

MOH Ministry of Health

S&DT Special and Differential Treatment

SCFAD Standing Committee on Foreign Affairs and

Defence

SO Standing Order

TFA Trade Facilitation Agreement

WTO World Trade Organisation

WTO-TFA World Trade Organisation Trade Facilitation

Agreement

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RECOMMENDATION:

The Committee recommends:

Parliament to ratify the World Trade Organisation Trade Facilitation Agreement.

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PART 1

1.0 INTRODUCTION

The Parliament Standing Committee on Foreign Affairs and Defence undertook a review of

the WTO Trade Facilitation Agreement that was proposed by the Government of the

Republic of Fiji for ratification.

1.1 The Standing Committee on Foreign Affairs and Defence

The Committee was established under Standing Orders (SO) 109(2)(e) of the

Parliament of the Republic of Fiji. The Standing Committee is mandated to look into

matters related to Fiji’s relations with other countries, development aid, foreign direct

investment, oversight of the military and relations with multi-lateral organisations.

Under SO 110(1)(e) the Committee is also tasked with reviewing international treaties

and conventions ratified by the Government and monitor their implementation.

The Committee comprises of five Honourable Members which are drawn from both

sides of the House in a bi-partisan manner.

1.2 Committee Members

The members of the Standing Committee on Foreign Affairs and Defence are:

Hon. Netani Rika (Chairman)

Hon. Mataiasi Niumatawalu

Hon. Mosese Bulitavu

Hon. Ratu Suliano Matanitobua

Hon. Alexander O’Connor

During the Standing Committee's meetings, the following alternate membership arose

pursuant to Standing Order 115(5):

Hon. Jilila Kumar

Hon. Jiosefa Dulakiverata

Hon. Viliame Gavoka

Hon. Salote Radrodro

Hon. Ro Kiniviliame Kiliraki

Hon. Howard R. Politini

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1.3 Procedure and Program

The Standing Committee on Foreign Affairs and Defence met in the Parliament

Complex from 3rd October 2016 to discuss and plan their strategy for receiving public

submissions.

The Committee placed advertisements in the Fiji Sun and Fiji Times from the 2nd to

13th of November 2016. The advertisement was also placed on the Parliament website

(www.parliament.gov.fj).

The Committee met in the Parliament Complex between 12th October and 25th

November 2016 to hear oral submissions on the WTO Trade Facilitation Agreement.

The Committee received written and oral submissions on the WTO Trade Facilitation

Agreement from key stakeholders between 12th October to 25th November 2016 and

in the Western Division from the 14th to 15th November 2016.

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PART 2

2.0 WTO - TRADE FACILITATION AGREEMENT

2.1 Background

On 26th September 2016, the WTO Trade Facilitation Agreement was referred to the

Standing Committee on Foreign Affairs and Defence Committee for its deliberation.

Under Section 51 of the Constitution, “An international treaty or convention binds the

State only after it has been approved by Parliament.”

Traders from both developing and developed countries have long pointed to the vast

amount of “red tape” that still exists when moving goods across borders which poses a

particular burden on small and medium-sized enterprises.1

To address this, the WTO member countries concluded negotiations for a Trade

Facilitation Agreement at their 2013 Bali Ministerial Conference and are now in the

process of adopting measures needed to bring the Agreement into effect.2

2.2 What is the TFA Global Reform?

The TFA is a global reform of customs procedures, which seeks to improve efficiency in

trade crossing borders. Collaboration and having better defined roles amongst the relevant

border agencies, contributes to the efficiency at the borders and reduces the cost and time

taken to clear goods.3

The TFA contains provisions for expediting the movement, release and clearance of

goods, including goods in transit. It also sets out measures for effective cooperation

between customs and other appropriate authorities on trade facilitation and customs

compliance issues.4 It further contains provisions for technical assistance and capacity

building in this area.

The Agreement will help improve transparency, increase possibilities to participate in

global value chains and reduce the scope for corruption.5 The SCFAD also believes the

agreement will strengthen accountability.

1 Solicitor-Generals Office, World Trade Organisation (WTO) Trade Facilitation Agreement (TFA),

Summary of the Agreement 2016. 2 ibid 3 ibid 4 ibid 5 ibid

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2.3 What is the Special and Different Treatment (S&DT) Provisions?

Section I of the Trade Facilitation Agreement contains provisions for expediting the

movement, release and clearance of goods, including goods in transit. It clarifies and

improves the relevant articles (V, VII, and X) of the General Agreements of Tariffs and

Trade (GATT) 1994. It also sets out provisions for customs cooperation.6

Section II of the Trade Facilitation Agreement contains S&DT provisions that

developing and Least Developed Country (LDC) Members can use to determine when

they will implement individual provisions of the agreement and to identify provisions that

they will only be able to implement upon the receipt of technical and financial assistance

and support for capacity building.7

For provisions designated as Category B and C, the Member must provide dates for

implementation of the provisions.8

2.4 Category A

Provisions that the Member will implement by the time the Agreement enters into force

(or in the case of at least-developed country Members within one year after entry into

force)9.

2.5 Category B

Provisions that the Member will implement after a transitional period following the entry

into force of the Agreement.10

2.6 Category C

Provisions that the Member will implement after a transitional period following the entry

into force of the Agreement and requiring the acquisition of assistance and support for

capacity building.11

Section III of the Trade Facilitation Agreement contains provisions that establish a

permanent committee on trade facilitation of the WTO, requires Members to have a

national committee to facilitate domestic coordination and implementation of the

provisions of the agreement. It also sets out final provisions.12

The Trade Facilitation Agreement comes into force once two thirds of the WTO

Memberships (about 108 Members) ratify the Trade Facilitation Agreement. So far 92

countries have accepted the Protocol of Amendment to insert the Trade Facilitation

Agreement into Annex 1A of the WTO Agreement.13

To benefit from S&DT, a Member must categorise each provision of the Agreement and

notify other WTO Members of these categorisations in accordance with specific timelines

outlined in the agreement.14

6 ibid 7 ibid 8 ibid 9 ibid 10 ibid 11 ibid 12 ibid 13 ibid 14 Ibid

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PART 3

3 .0 COMMITTEE’S OBSERVATIONS AND AREAS OF CONCERN

3.1 Requirements for Implementation

3.1.1 The WTO Trade Facilitation Agreement is applicable to all border

agencies such as Fiji Revenue and Customs Authority (FRCA),

Biosecurity Authority of Fiji (BAF), Fiji Ports Corporation Limited and

Ministry of Health & Medical Services (MOHMS), Police Border Control

Unit, Air Terminal Service (ATS), Airports Fiji Limited (AFL) and courier

services. These border agencies also have a responsibility to consult and

create awareness about their reform initiatives and strengthen partnerships

with private sector agencies such as freight forwarders.

3.1.2 Following the coming into force of the Agreement, all member countries

will be required to implement the TFA in accordance with the

commitments provided in the 3 categories.15

3.1.3 Therefore, in Fiji’s case all provisions that are in Category A will be

implemented immediately. These provisions will not have any new

implementation requirements as systems and procedures in place are

adequate for implementation.16

3.1.4 Provisions listed in Category B will require progressive implementation as

work on infrastructure development and legislative changes have already

begun and will require time to put in place.17

3.1.5 The implementation of Category C cannot be done without technical and

financial resources, therefore the implementation will be done when

technical assistance is available from development partners.18

3.2 Impact of Ratification

3.2.1 It is prudent to note that in February 2016, the Fijian Government in its

World Trade Organisation Trade Policy Review made a commitment

towards ratifying the trade facilitation agreement by the end of 2016.19

3.3 Benefits

a) The ratification of this treaty is a positive step towards the

modernisation programme Fiji isundertaking, but will also contribute

to the reduction in time and cost it takes to facilitate the clearance of

goods at our borders and ports.20

15 ibid 16 ibid 17 ibid 18 ibid 19 ibid 20 ibid

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b) Making our systems and processes more efficient and effective to

boost revenue collection efforts.21

c) Ratifying the TFA will also support Fiji’s efforts to ensure effective

collaboration and having better defined roles amongst the relevant

border agencies. This will contribute to the efficiency at the borders

and reduces the costs and times it takes to clear goods.22

d) The TFA contains provisions for technical and capacity building under

Category C; therefore, ratifying the WTO Trade Facilitation

Agreement will enable Fiji to also access support from its cooperating

partners that will contribute to trade facilitation and customs

modernisation efforts.23

e) This will also accelerate most of the important programs like “Single

Window” that Fiji is undertaking and other measures needed for

effective implementation.

f) The Consumer Council of Fiji recognizes the reform initiatives that

will be brought about by the Agreement. It noted that the

strengthening of specific outcomes of the reforms will improve

customer service, short turn-around times and reduction in the cost of

doing business.

g) FRCA also highlighted the expected benefits of TFA for Fiji through

various global studies:

Reduction of trade cost by 14.5%

Boosting global trade by US$1 trillion and creating 21 million

new jobs annually.

Also 66% of this is estimated to benefit developing countries

like Fiji.

h) BAF stated that the implementation of this treaty will improve

customer service delivery.

3.4 Stakeholders Observations

There was a general consensus from the stakeholders to the Government to ratify

the protocol.

The Stakeholders include:

border control agencies – FRCA, BAF, MOHMS, ATS, AFL;

Consumer Council of Fiji and;

the Ministry of Industry, Trade and Tourism.

21 ibid 22 ibid 23 ibid

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3.5 Challenges

3.5.1 FRCA

Excessive documentation requirements

Inefficient border – crossing procedures

Transport and transit requirements

Lack of transparency and predictability

Lack of cooperation and coordination

Lack of automated process and use of information technology

High administrative cost

3.5.2 BAF

Budgetary, equipment and human resource constraints which limits

their capacity to effectively address the risks brought about by harmful

plants, fauna, pests and other hazardous materials.

3.5.3 Importers

According to the importers the inconsistency in BAF policies and

practices is a barrier to trade for importers and exporters based in Fiji.

They highlighted the need for policy review and the need for consistent

application of bio-security procedures, fees and charges by BAF.

3.5.4 AFL and ATS

Their initiative to procure the necessary x-ray and scanning machines

to facilitate the security processes of checking passengers, luggage,

baggage and cargo that out-bound and in-bound. These sophisticated

expensive machines are a requirement of the International Civil

Aviation Organisation (ICAO) that Fiji is a member of.

3.5.5 The Fiji Police Border Control Unit (FPBCU)

There is a need to modernise its safety and security services at the Nadi

International Airport and all ports of entry also the need to officially

gazette the Unit to improve their services delivery.

3.6 Gender Analysis

The Parliament of Fiji Standing Orders 110(2) requires standing committees give full

consideration the principle of gender equality so as to ensure all matters are considered

with regard to the impact and benefit on both men and women equally. The Committee is

satisfied that the matters considered in this report, impacts on both women and men

equally. The ratification of the WTO-Trade Facilitation Agreement will not have any

adverse effect on gender equality.

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PART 4

4.0 CONCLUSION

The Committee has agreed that Fiji’s ratification of the WTO Trade Facilitation Agreement is in

the national interest. It also noted the following potential benefits:

quick turn-around of goods at the border;

better facilitation of trade and;

reduced cost of doing business.

The Committee recommends Parliament to expedite ratification of the Treaty.

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REFERENCE

Constitution of the Republic of Fiji (2013).

Parliament of the Republic of Fiji (2016) Standing Orders of the Parliament of the

Republic of Fiji, 19th February 2016.

World Trade Organisation, Trade Facilitation Agreement, World Trade Organisation –

Easing the flow of Goods across borders, Trade Facilitation Agreement. Available at:

www.wto.org/english/thewto_e/20y_ewto_tradefacilitation_e.pdf [Accessed 04/10/2016].

Ratification of the WTO-TFA Agreement Brief, Office of Solicitor-General, September

2016.